High costs of coverage, LTC crisis continue to shape health care ecosystem

ATLANTIC CITY, N.J. -- The U.S. health ecosystem is "very expensive and increasingly so and very fragmented and increasingly so, said Katherine Hempstead, senior policy officer at the Robert Wood Johnson Foundation.

"We spend a lot more and have a lot less to show for it," she said.

Hempstead's comments were part of a live podcast on health issues during the National Association of Benefits and Insurance Professionals Annual Convention in Atlantic City, N.J.

Health care costs "have been increasing quite a bit in the last couple of years, and the proportion of Americans who saying paying for health care is the biggest financial problem in their household has increased as well," she said.

"I'm not sure how we will get ourselves out of it."

Americans spend more on health care than do citizens of other nations, and Hempstead said an aging population that requires more hospital-based care, and a wave of new pharmaceutical offerings that have high pricetags are driving that health care spend.

'Fewer choices for 2027'

In the next 12 months, health insurance brokers should be aware that consumers in the individual market will increasingly be pushed into plans with higher out-of-pocket exposure, she said.

"For a lot of people, it's not the right choice. Brokers must make sure the person they are working with knows what their out-of-pocket costs will be at different plan levels. Also, look at plans exiting the individual market. People in many parts of the country will have fewer choices for 2027."

Hempstead said she would like to see federal policymakers address the long-term care crisis in the U.S., describing it as "an unfinished chapter in our safety net."

She called on policymakers to address a looming Social Security and Medicare shortfall while asking "what can we do to fix what we have and build on that?" She said that the biggest myth Americans believe about health care is that Medicare covers long-term care.

Mike Smith, president emeritus of The Brokerage Inc., said government and the industry must do a better job of educating consumers what Medicare does not pay for.

Looking back at the Affordable Care Act, Smith said one thing the law got right was guaranteed issue and covering those with preexisting conditions.

"But I would like to see a high-risk approach with a high-risk pool," he said. "What we're doing right now is chasing away insurance companies from the ACA marketplace. We have a very unstable market in the under-65 market and we need to stabilize that."

Brokers must stay up to date every day, and "they have to become more strategic in order to survive," Smith said.

"They get into the weeds to serve their clients," he said. "I don't know what clients would do without them."

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Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at susan.rupe@innfeedback.com.